Feb. 3, 2014
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John Shinal, technology columnist for USA TODAY. / USA TODAY

by John Shinal, Special for USA TODAY

by John Shinal, Special for USA TODAY

SAN FRANCISCO - A new report from the National Bureau of Economic Research has just answered a question often asked of the San Francisco Bay Area: Why would anyone want to live where the median price of a house costs more than $500,000?"

The answer: a better chance at upward economic mobility.

Using income data on 40 million Americans, the government research economists calculated how likely it was for a U.S. family to go from the bottom fifth in annual income to the top fifth in one generation.

San Franciscans had a 12.2% chance of this kind of life-changing economic prosperity, second-best for residents of the 50-largest U.S. metro areas, according to the report.

Residents of the adjacent San Jose area, which includes the central mass of Silicon Valley tech headquarters, had the best chance of upwardly mobility, at 12.9%.

That's been enough to keep people flocking to northern California, driving up the median cost of a Bay Area home to $540,000, according to DataQuick.

Rents are equally expensive, as recent protests by anti-eviction activists in the city made clear.

"Where is the Land of Opportunity? The Geography of Intergenerational Mobility in the U.S." looked at data on families with children born after 1980.

What the report highlights is a Top-10 list of cities where the American dream is still alive.

What most of those cities have in common is a lot of high-paying tech jobs, according to separate data from the Bureau of Labor Statistics.

As of May 2012, the mean annual wage in San Jose, where a third of the jobs are in tech occupations, was $69,700, the BLS data shows.

That was 52% higher than the U.S. mean salary of $45,800, with half of Americans making more than that figure and half making less.

Tech workers in San Jose are paid even higher, with a mean salary of $108,600.

The area added thousands of jobs during the telecom and dot-com booms of the late 1990s, thanks to Cisco Systems, Oracle, Yahoo and others.

Thousands more were added more recently by Internet software firms such as Google and Facebook.

The same holds true in San Francisco, where a growing number of tech workers are commuting south every day to Silicon Valley, as well as working for Salesforce.com, Twitter and other tech firms based in the city.

San Francisco residents were paid an average annual wage of $66,100, according to the same BLS data, or 44% more than national average.

Tech workers here in May 2012, were paid a mean annual wage of $100,700.

Those higher salaries, which help drive up housing costs, help explain the rising number of evictions in the city â?? and the resulting street protests against tech commuter buses.

Still, people keep moving to San Francisco, and the report by the Bureau of Economic Research suggests economic opportunity is a primary reason.

Going down the list of best MSAs for upward economic mobility, families in the Washington, D.C., and New York metro areas had the third- and sixth-best chance of vaulting in income during the period covered by the report, respectively.

Those two MSAs are also the only ones with even more tech workers than San Jose, as of 2010, thanks to all the software engineers and systems designers employed by federal agencies and on Wall Street, respectively.

The Seattle MSA, home to Microsoft and Amazon.com, was No. 4 on the list, as residents there had a 10.9% chance of going from the bottom fifth to the top fifth in income within one generation.

Tech workers there were paid a mean annual salary of $93,500 in May 2012, the BLA data says.

Rounding out the top seven best MSAs for upward mobility were Salt Lake City, a new and burgeoning tech hub at No. 5, and Boston, tied with New York for No. 6.

As of 2010, Boston had the fourth-most tech workers of any U.S. metro area.

Taken together, the data points to at least one avenue that still leads toward the American dream.

It means cities wanting to promote upward economic mobility should do their best to attract more tech jobs, while workers still pursuing the dream should consider either working at one or preparing their children to do so.

John Shinal has covered tech and financial markets for 15 years at Bloomberg, BusinessWeek, the San Francisco Chronicle, Dow Jones MarketWatch, Wall Street Journal Digital Network and others. Follow him on Twitter: @johnshinal.